The White House recently announced a Presidential initiative to protect residential tenants across the country from surprise “junk fees” charged by landlords. Generally, these are fees that are included in addition to rent that may be collected prior to the commencement of a lease – such as rental application fees – or extra fees during the lease term (in addition to rent) for things like paying rent online. In its official press release on July 19, 2023, the White House stated –
“Hidden fees not only take money out of people’s pockets, they also make it more difficult to comparison shop. A prospective renter may choose one apartment over another thinking it is less expensive, only to learn that after fees and other add-ons the actual cost for their chosen apartment is much higher than they expected or can afford.“
The announcement includes immediate commitments from Zillow, Apartments.com and AffordableHousing.com to provide consumers with transparency on fees, with the goal of making it easier to calculate the “total cost” or “all-in cost” prior to signing a lease.
Notably, New York State already limits rental fees. As part of its sweeping changes to Landlord-Tenant law included in the 2019 Housing Stability and Tenant Protection Act (L. 2019 Ch. 36 eff. June 14, 2019), the State added Real Property Law § 238-a. The law first limits landlords’ ability to collect any supplemental fees from applicants for apartments or from new tenants at the beginning of the lease besides a charge to reimburse the landlord for costs of background checks and credit checks. Then, the State limits the amount the landlord may collect for these checks to $20.00, or the actual cost of the check – whichever is less and requires the landlord to provide a copy of the background or credit check to the applicant.
The U.S. Department of Housing and Urban Renewal released a study on rental fees with suggestions for state and local governments on measures that will encourage transparency and fairness in the residential rental market.
Landlords or Tenants seeking further guidance on rental fees are encouraged to contact the Bousquet Holstein PLLC Real Estate team for assistance.